Big Tax Cuts May Pass Legislature

At the midpoint of the legislative session, the Florida Senate and the House of Representatives are stalemated over the issue of health care expansion under the Affordable Care Act and funding for the Low Income Pool (LIP).

Under current law the funding associated with the LIP will expire on July 1, 2015, leaving a $2 billion hole in the budget.  

One tax cut, on telephone and cable services, would be a $471 million hit to the state's revenue stream, but would have only a slight impact on individual Floridians and families -- an estimated annual savings of $40 per person and $160 per family.

The size of the proposed $471 million cut is put in context when compared to funding amounts for vital state programs. For example, it is larger than the total budget of the Voluntary Prekindergarten Program.  And it is 75 times larger than the proposed general revenue increase for Alzheimer's respite services for 167 seniors  and funding for an additional 406 seniors in the Community Care for the Elderly program.

The needs of the state suggest that now is not the time to pass $600 million to $800 million in tax cuts. 

>Read the report. 


Big Tax Cuts May Pass Legislature

At the midpoint of the legislative session, the Florida Senate and the House of Representatives are stalemated over the issue of health care expansion under the Affordable Care Act and funding for the Low Income Pool (LIP).

Under current law the funding associated with the LIP will expire on July 1, 2015, leaving a $2 billion hole in the budget.  

One tax cut, on telephone and cable services, would be a $471 million hit to the state's revenue stream, but would have only a slight impact on individual Floridians and families -- an estimated annual savings of $40 per person and $160 per family.

The size of the proposed $471 million cut is put in context when compared to funding amounts for vital state programs. For example, it is larger than the total budget of the Voluntary Prekindergarten Program.  And it is 75 times larger than the proposed general revenue increase for Alzheimer's respite services for 167 seniors  and funding for an additional 406 seniors in the Community Care for the Elderly program.

The needs of the state suggest that now is not the time to pass $600 million to $800 million in tax cuts. 

>Read the report. 

 
Keeping and Modernizing the Corporate Income Tax Will Best Serve Florida

Governor Rick Scott and legislative leaders are moving forward with a plan to cut corporate income tax revenues again after previous cuts in his first term. Action on these bills comes amid a renewed pledge by Scott to end the tax entirely, as he first proposed when inaugurated in 2011.

Relatively few businesses in Florida pay the tax, a huge proportion of which are very profitable corporations.

Both reducing collections from the tax and eliminating it would have undesirable effects.  Both would reduce income available to meet Florida's needs.  Secondly, any reduction would further skew Florida's tax system, leaving others to assume a greater share of the responsibility for funding vital state services, making Florida's unfair tax system even more unfair.

Eliminating the tax would allow profitable corporations, many of them multistate and multinational, to escape paying for the benefits they receive from state-funded services. 

A better alternative would be to modernize and strengthen the corporate income tax to make sure that profitable corporations pay their fair share and that other taxpayers don't bear a disproportionate share of the cost of state services.

> Read the report.

 
Census Data Show Florida Struggling to Recover from Recession

Florida’s poverty rate remained unchanged in 2013, median household income remained lower than before the Great Recession,and the state’s percentage of residents without health insurance was third-highest in the nation, the U.S. Census Bureau reported this week. The data from the American Community

Survey and Current Population Survey paint a picture of Florida still poorer than it was five years previously, despite the ongoing economic recovery.

> Read the report.

 
The Condition of Florida, 2014

Florida is still recovering from the Great Recession. As expected in any recovery period, jobs are coming back, although too few to employ the same percentage of Floridians that had jobs before the recession.

State revenues are increasing now and are expected to climb each year into the foreseeable future. But policymakers have used much of that growth money to provide new tax breaks each legislative session instead of reinvesting in areas of the budget squeezed during the recession years.

Telling points: Florida ranks 49th in the nation in per capita state and local spending for education, but corrections is funded well enough to rank 23rd among the states. And the state ranks 43rd in a recent survey of quality of services for the elderly, disabled and their caregivers. The state ranks very low in other measures of well- being affected by state expenditures, as this report indicates.

> Read the report.

 
MAGI: The Other Change to Medicaid Eligibility and What It Means to Florida

Starting January 2014, Florida will begin using the concept of Modified Adjusted Gross Income (MAGI) when determining eligibility for its Medicaid and CHIP programs.

More than just a number, MAGI is a new method for counting and calculating income under the Affordable Care Act.

Specifically, MAGI will provide a basis for aligning, simplifying and streamlining eligibility across Medicaid, CHIP, and the Premium Tax Credits and Cost-Sharing Reductions available through the new Health Insurance Marketplace.

The "translation" between the current system and MAGI is not completely straightforward, however. In fact, as a result of the differences between the two systems, some Floridians who are Medicaid-eligible under current rules will become ineligible in 2014, even if nothing about their situation changes. On the other hand, some who are ineligible under current rules will be able to qualify once MAGI is implemented.

> Read the report.

 
Improving Fiscal Condition Allows Legislature to Address Previous Budget Cuts, Increase Tax Fairness

As legislative committees meet in preparation for the 2014 session that begins in March, lawmakers enjoy a much-improved state budget situation for their construction of a new state budget for the next fiscal year.

This fact provides legislators with the opportunity to take a fresh look at making investments in the future of Florida and assuring that the state's tax system is both fair and sufficient to meet state needs.

Now that the state is again showing a healthy balance of funds that are expected to recur and increase, a top priority should be investing again in the social infrastructure.

> Read the report.

 
State Estimates of Health Premiums Are Faulty, Misleading Consumers

Starting October 1, 2013, Floridians will be able to purchase private health insurance plans through the new Health Insurance Marketplace created through the federal health reform law.

On July 31, the state entity responsible for regulating health insurance policies released information titled "Individual Monthly Health Insurance Premiums Before and After PPACA."

Unfortunately, the information provides no credible comparison of the impact of health reform on rates.  Its continued use as a basis for official projections is likely to result in direct harm to consumers.

> Read the report.

 
Uncovering Coverage Opportunities In Health Insurance Marketplace

Beginning October 1, 2013, millions of Floridians who are uninsured - or who are insured but have inadequate or unaffordable coverage - will be able to purchase a health plan through the new Health Insurance Marketplace established by the federal Patient Protection and Affordable Care Act (ACA).

Although a number of details remain unclear about Florida's Marketplace and the specific plan offerings to be made available to consumers there, the bottom line is that many more Floridians will be able to get and keep quality, affordable health insurance coverage than ever before.

> Read the report.

 
Comparison of Alternatives for Medicaid Expansion

With only two weeks left in the 2013 regular session, the question of whether the Florida Legislature will extend meaningful, affordable health coverage to more than a million very low-income, uninsured Floridians remains unanswered.

What the majority in both the House and Senate have made clear is that they have no plans to support a straightforward expansion of the current Medicaid program. As a result, three different alternatives to "Medicaid expansion" are presently working their way through the legislative process.

However, only one of the three proposals would allow significant numbers of Floridians below the poverty level to get and keep real coverage that would provide sustained access to essential care. That same proposal is also the only one of the three that would enable Florida to draw down up to $51 billion in federal matching funds over the next ten years, rather than allowing taxpayer funding earmarked for Florida to be diverted to benefit other states.

This brief compares the three proposals and their implications for the two key groups of stakeholders affected by the decision: low-income, uninsured Floridians and Florida taxpayers generally.

> Read the report.

 
Rejection of Medicaid Expansion Would Prove Costly to Businesses

Many of the businesses that anchor the state's service-based, tourist-dependent economy would be placed at a significant competitive disadvantage if Florida rejects Medicaid expansion.

These include, for example, Florida's retail, restaurant and hotel chains.

If Florida expands Medicaid, employers pay no penalty for low-wage workers who enroll in Medicaid.

As a result, a large employer that does not provide meaningful, affordable coverage to its eligible low-wage employees will save $3,000 for each such employee that enrolls in Medicaid instead of using Premium Tax Credits in the Exchange—but only if Florida elects to expand Medicaid.

> Read the report.

 
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The Florida Center for Fiscal and Economic Policy
579 East Call Street
Tallahassee Florida 32301
Phone: 850-325-6480
Email: info@fcfep.org

The mission of the Florida Center for Fiscal and Economic Policy is to conduct independent research, develop new ideas, and advise policymakers on state fiscal and economic policy.  The Center pays particular attention to policy impacts on low- and moderate-income individuals, families and neighborhoods, workers, and small businesses.  The Center works to heighten public awareness of the need to adequately fund programs that improve opportunities, choices, quality of life outcomes, and the economic well-being of all Floridians.


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